1.

Andrew decides to open a new business selling marriage certificates to parties wanting to
immigrate into Australia. Is Andrew able to do this? Would the contracts Andrew enters into be
legally binding?

2. The sale of gunpowder becomes illegal by an Act of Parliament but Rob still wants to sell his
remaining stock of gunpowder. Is he able to do so?

3. Tom is a semi-skilled financial adviser who is advising John. Tom has knowledge of a key change in
legislation which will impact upon his right to advise clients. The legislative change will mean that,
without further training, Tom will not be able to advise clients. Regardless of this change, Tom
continues to advise his clients. What implications, if any, will this have on the contracts he forms
with his clients?

4. A bank found that the goods in a godown, which was pledged to it against a loan, were either
fraudulently overvalued or withdrawn in collusion with bank officials. The borrowers agreed to make
up for the deficiency by hypothecating more property. Some delay having taken place in the
hypothecation, the bank filed a complaint which was withdrawn after the hypothecation was
completed. Decide, giving reasons whether the agreement is valid.

5. A, a well-known industrialist enters into an agreement with a newspaper company whereby the
company is restrained from commenting on the conduct and business practices of A. Is this
agreement valid? Elaborate your stance with adequate reasons.

6. A company was licensed to manufacture liquor and beer but it confined its business to produce
only ‘sake’, Japanese liquor made from rice. Its only customer was the government. It entered into
an agreement with another wine and beer manufacturing company by which it sold its business and
goodwill of manufacturing wine and beer but not the right to produce sake. Elucidate the validity of
this agreement with respect to the Indian Contract act, 1860.

7. The articles of association of a company provided that the traders and employees working in the
company shall not deal with outsiders, the penalty for breach being fine and expulsion. The legality
of the AoA was challenged on the ground that its objects and methods were unlawful as it aimed at
the creation of a monopoly by shutting out all competitions and was in defiance of the spirit of
Sections 23 and 27. Decide.

8. A seller of combs entered into an agreement with all the manufacturers of combs in the city of
Patna whereby the latter undertook during their lifetime to sell their entire product to the particular
seller and to his heir and not to sell the same to anyone else. Decide the validity of this agreement.

Answer 1- According to Section 24 of the Indian Contract Act, 1872, if a part of the consideration of
the contract is unlawful, i.e. against the law, then the agreement is considered void.